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[QUOTE="Millhouse, post: 641834, member: 78"]
quick and dirty bundling
 
Mr Millhouse loves ESPN but watches Bravo occasionally for milfs in hot tubs. Mrs Millhouse loves Bravo but occasionally watches gymnastics.
 
Ala carte world, Bravo is better off with only Mrs Millhouse paying what she thinks bravo is worth.
 
Same for espn
 
Here a bundle gives Mr Millhouse and Mrs Millhouse programming worth more than what they paid for it and the cable company makes more.
 
Win win.
 
Simple example but the principle is the same with hundreds of channels and millions of customers, it's just the math is way harder.
 
[FONT=Calibri][COLOR=#000000]Worth[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mr Millhouse ESPN $10[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mr Millhouse Bravo $4[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mrs Millhouse ESPN $3[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mrs Millhouse Bravo $10[/COLOR][/FONT]
 
[FONT=Calibri][COLOR=#000000]Bundle cost $12[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Cable makes $24.[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mr Millhouse gets $14 for $12[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mrs Millhouse gets $13 for $12[/COLOR][/FONT]
 
[FONT=Calibri][COLOR=#000000]Ala carte[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Both channels cost $10.[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mr Millhouse gets espn worth $10 to him for $10[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Mrs Millhouse gets bravo worth $10 to her for $10. No surplus[/COLOR][/FONT]
[FONT=Calibri][COLOR=#000000]Cable makes $20[/COLOR][/FONT]
 
[FONT=Calibri][COLOR=#000000]forcing ala carte destroys value.  viewers lose $3 of value to them, cable loses $4 of revenue[/COLOR][/FONT]
 
[FONT=Calibri][COLOR=#000000]Bundle is best option for everyone[/COLOR][/FONT]
[/QUOTE]

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